Open innovation with startups: Who can do it? And how does it work?

Innovation – yes, but how? Globalization and digitization have fundamentally changed the rules of the corporate world. If you want to endure, you have to be ready for change. It is not strength and experience alone that are decisive, but above all adaptability. Many companies are therefore looking for ways to systematically integrate the topic of innovation into their everyday business. One solution to this is “open innovation” processes, in which external players such as startups are specifically brought in to broaden the company’s own horizons, develop new ideas and drive change.

Definition: Open Innovation – What is it?
The term “open innovation” stands for measures in which companies deliberately open themselves up to the outside world in order to get innovation processes going. The term “open” can be understood in two senses: as openness to completely new ideas and solutions, and as openness to external experts and startups that bring their own perspective to the challenges that the respective company is currently dealing with.

This article focuses on so-called “outside-in open innovation,” which is about bringing in ideas from outside for companies. In addition, open innovation can also be defined as a process in which a company makes its own innovations available to other partners, for example in the form of licenses. In this case, experts speak of “inside-out open innovation”.

Advantages of Open Innovation

1. change of perspective
Anyone who has been working in the same organization for a long time knows the problem: The “internal view” blocks the view of the big picture and sometimes also of obvious solutions that are more visible to external innovators. The exchange with external experts and startups helps to change the perspective and to look at the own problems from a new point of view.

2. expertise
Most industries are now changing so quickly that it is often no longer possible for decision-makers, or even internal specialists, to stay informed about all new developments or even to integrate them directly into the company. That is why it is worthwhile to obtain expertise from outside. Due to their flexibility, startups in particular can get to grips with problem areas extremely quickly and deeply and find unexpected solutions. Through open innovation, established companies can benefit from this expertise.

3. networking
No one needs to be able to solve every problem alone. But it is crucial to know someone who can help when in doubt. Through Open Innovation processes, such as Startup Challenges, companies can not only gain access to new solutions on a selective basis, but also build a network with startups and experts from various relevant disciplines and industries, from which they will continue to benefit in the future.

4. flexibility
Open innovation processes can be customized and enable companies to get a comprehensive picture of solutions in a problem area before they decide on a specific product or cooperation partner, for example. This can be done, for example, in the course of a startup matchmaking or a startup challenge.

5. speed
Through open innovation processes, companies can drive innovations at a much higher speed than with their own development departments. This can give them a market advantage over competitors, which in turn enables them to become even more innovative and further secure their position.

6. quality
Many organizations want to innovate, but ask their employees to develop and implement it as an “additional task”. This quickly leads to overload. The desired processes then do not move fast enough and the results lack quality. Experienced matchmakers like Ambivation know the startup ecosystem inside out and can help companies find the best experts to solve a problem.

Open Innovation – Who can do it?

Basically, all companies from small and medium-sized enterprises to startups and large corporations can be participants in Open Innovation processes – both as innovation-giving and innovation-receiving parts.

Research and development departments and innovation managers in companies can, for example, initiate a competition or a Startup Challenge, or even keep an eye out for calls for proposals in which innovations from their own company can be introduced and marketed. Those who do not have expertise in innovation within their own company have the option of consulting external experts such as the matchmakers from Ambivation. They accompany the innovation process from planning to implementation.

Strategies for Open Innovation

• Startup Challenge
  A Startup Challenge is one of the easiest and fastest ways to get an Open Innovation process going. It is a type of competition in which startups are asked to submit their ideas and solutions.
  For a Startup Challenge to work, incentives must be created for the participating startups. For large corporations, the prospect of becoming a contractor for a renowned company is sometimes enough. Small and medium-sized companies should design a strategy in advance so that they are noticed by potential participants and they take the time to address the respective problem area and submit an application.
  If in doubt, it is also advisable here to bring experts such as innovation managers or the matchmakers from Ambivation on board for process support. This is because both in a challenge in which few participants apply and in a competition with a lot of feedback, a particular challenge lies in the classification and evaluation of submitted proposals and the subsequent initiation of cooperation.
• Startup cooperation
  Many larger companies and corporations have been collaborating with startups for years to drive innovation within their own companies. Some participate in accelerator programs or even initiate them themselves. Others set up co-working spaces to gain access to a young generation of creatives and founders and their ideas and technologies. Others become venture clients or investors.
  For all of them, a particular challenge lies in finding suitable cooperation partners who can actually deliver what they promise. No easy feat in a startup world that is growing by the day! Matchmakers like Ambivation therefore support companies in filtering relevant solutions out of 1000 startups and in finding the most efficient as well as least risky form of cooperation for the respective request.
• Projects
  For public organizations and universities in particular, it is a good idea to solicit innovation within the framework of projects or via project positions. These offer the opportunity to focus on topics such as innovation, sustainability and digitization without having to immediately create permanent positions. Many project ideas can be realized through funding from public funding pots. It is therefore up to the respective organization to be well informed here and to apply in good time.
  In order for external experts to apply for projects or project positions, however, it is important to make them attractive. To this end, there should be a certain openness in the design, which offers scientists and specialists the opportunity to further develop or even implement their own research projects within the framework of the project.
• Networks
  Networks can be an excellent means of driving innovation. Companies that work together in networks often have great clout because their expertise complements one another and, within the framework of their cooperation, they are also financially able to realize projects that lone fighters would not be able to tackle.
  Within the framework of such networks, a wide variety of organizational forms, including startups, SMEs, corporations and universities, can set up great joint projects.

The challenge of open innovation
The biggest challenge when it comes to developing and implementing innovation is the human factor. On the one hand, this concerns the corporate culture in the companies that strive for innovation, but on the other hand, it also concerns every individual who is affected by the respective change.
In a corporate culture that is not open to change or even to mistakes, it can be difficult to establish innovation. And people who may have been accustomed to certain processes for years or even decades naturally do not find it easy to change.
In this respect, it is particularly important not to focus solely on technology when implementing open innovation, but to involve the team in the transformation process right from the start. In particular, this means listening carefully and taking the perspectives and problems of all employees seriously.